Coca Cola 2006 Annual Report Download - page 20

and/or sales or value-added taxes in many jurisdictions in which we operate. Increases in income tax rates could
reduce our after-tax income from affected jurisdictions, while increases in indirect taxes could affect our
products’ affordability and therefore reduce demand for our products.
If we are not able to achieve our overall long term goals, the value of an investment in our Company could be
negatively affected.
We have established and publicly announced certain long-term growth objectives. These objectives were
based on our evaluation of our growth prospects, which are generally based on volume and sales potential of
many product types, some of which are more profitable than others, and on an assessment of potential level or
mix of product sales. There can be no assurance that we will achieve the required volume or revenue growth or
mix of products necessary to achieve our growth objectives.
If we are unable to protect our information systems against data corruption, cyber-based attacks or network security
breaches, our operations could be disrupted.
We are increasingly dependent on information technology networks and systems, including the Internet, to
process, transmit and store electronic information. In particular, we depend on our information technology
infrastructure for digital marketing activities and electronic communications among our locations around the
world and between Company personnel and our bottlers and other customers and suppliers. Security breaches of
this infrastructure can create system disruptions, shutdowns or unauthorized disclosure of confidential
information. If we are unable to prevent such breaches, our operations could be disrupted or we may suffer
financial damage or loss because of lost or misappropriated information.
We may be required to recognize additional impairment charges.
We assess our goodwill, trademarks and other intangible assets and our long-lived assets as and when
required by generally accepted accounting principles in the United States to determine whether they are
impaired. In 2006, we recorded a charge of approximately $602 million to equity income resulting from the
impact of our proportionate share of an impairment charge recorded by CCE, and impairment charges of
approximately $41 million primarily related to trademarks for beverages sold in the Philippines and Indonesia;
in 2005, we recorded impairment charges of approximately $89 million primarily related to our operations and
investments in the Philippines; and in 2004, we recorded impairment charges of approximately $374 million
primarily related to franchise rights at Coca-Cola Erfrischungsgetraenke AG (‘‘CCEAG’’). If market conditions
in North America, India, Indonesia or the Philippines do not improve or deteriorate further, we may be required
to record additional impairment charges. In addition, unexpected declines in our operating results and structural
changes or divestitures in these and other markets may also result in impairment charges. Additional
impairment charges would reduce our reported earnings for the periods in which they are recorded.
If we do not successfully manage our Company-owned bottling operations, our results could suffer.
While we primarily manufacture, market and sell concentrates and syrups to our bottling partners, from
time to time we do acquire or take control of bottling operations. Often, though not always, these bottling
operations are in underperforming markets where we believe we can use our resources and expertise to improve
performance. We may incur unforeseen liabilities and obligations in connection with acquiring, taking control of
or managing such bottling operations and may encounter unexpected difficulties and costs in restructuring and
integrating them into our Company’s operating and internal control structures. In addition, our financial
performance and the strength and efficiency of the Coca-Cola system depend in part on how well we can
manage and improve the performance of Company-owned or controlled bottling operations. We cannot assure
you, however, that we will be able to achieve our strategic and financial objectives for such bottling operations.
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